European shares close higher as US-China tariff truce, US data buoy sentiment

European shares closed higher on Tuesday on optimism about the U.S.-China tariff truce and interest rate cuts by the U.S. Federal Reserve, while declines in heavyweight technology stocks limited gains.

The pan-European STOXX 600 index  closed 0.2% higher a day after starting the week lower.

Investors were relieved after Washington and Beijing extended a tariff truce by 90 days, staving off triple-digit duties on each other's goods until November 10.

"Equity markets have been pretty relaxed about all the trade news. The assumption seems to be that (U.S. President Donald) Trump will relent on everything and that it will all be OK," said Rob Perrone, investment specialist for Orbis Investments. "If the news is better than yesterday's, then stocks go up."

Most sectors on the benchmark STOXX 600  rose, led by energy  with a 1.5% advance. Vestas Wind Systems  outperformed peers with a 4.7% gain, after receiving U.S. orders for undisclosed projects.

Heavyweight tech shares  fell 2.1% to their lowest levels since early May. Software stocks in particular fell sharply on concerns that artificial intelligence could weaken this technology segment.